The inkjet counterfeiter

This article was taken from the November issue of Wired UK
magazine. Be the first to read Wired's articles in print before
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Behind an anonymous-looking door on the fifth floor of the
United States Secret Service headquarters, on H Street in
Washington DC, is a small, windowless room known by the agents who
work there as "the specimen vault". Lining the walls are dozens of
filing cabinets filled with narrow steel drawers, containing scores
of transparent plastic sleeves. In each sleeve is an individual
note of US currency - a single, five, ten, 20, 50 or 100. The face
value of the cash runs to millions of dollars. But the money in the
drawers is worthless.

The specimen vault is the reference library of the Secret
Service's counterfeit investigators. It holds an example of every
fake US tender confiscated since the end of the 19th century. Most
of the bills spent - or "passed", in the law-enforcement jargon -
were created decades ago by skilled artists familiar with the fine
engraving techniques and heavy machinery of the printing industry,
career criminals who churned out thousands of dollars at a time.
But the advent of desktop publishing has changed the forger's
profile, giving almost anyone with a copy of Photoshop and a
scanner the means to print money. And if opportunistic bedroom
forgers have made the crime more widespread, their operations are
often small-scale and easy to detect; few ever produce more than
$10,000.

But in January 2005, the Secret Service field office in Los
Angeles discovered a fake $100 bill of remarkably high quality.
Four years later in the specimen vault Kelley Harris, counterfeit
specialist with the Criminal Investigative Division, hands me a
Ziploc bag containing 14 bills which appear genuine. "Not bad," he
concedes. Despite the best efforts of the Secret Service, the
printer of these notes evaded capture for more than three years. By
then Albert Edward Talton, of Lawndale, California, was responsible
for putting more than $7 million in phony currency into
circulation; he made much of it using kit bought at his local
Staples office-supplies store. Albert Talton, 46, is charming and
soft-spoken, a big, fastidious man with a taste for expensive cars
and high-end audio equipment. Born and raised in southern
California, he has been a criminal for most of his life. For ten
years he was in and out of jail, and in 2001 he was convicted of
bank fraud and sentenced to five years. Yet he also studied
electrical engineering at California State University and is a man
of considerable ingenuity. In 1987, when Bose was manufacturing a
new type of speaker system, Talton wanted to know how it worked. "I
was amazed," he says from the Federal Correctional Institution in
Lompoc, California. "How could they get that much bass out of a
speaker the size of a shoe box?" So he bought himself a Bose set-up
for $2,500, went home, and took it apart. He figured out what the
company's technicians had done and built his own version. This
would not be his last experiment in reverse engineering.

In June 2004 he was released from prison, eventually finding
work at a car-repair garage in Inglewood, California. A few months
later his boss showed him a fake $50 note someone had passed to
him. Talton examined it and thought: "I could do better than
that."

There are few criminals pursued with more vigour than those who
make their own money. Counterfeiting is considered such a threat to
the fabric of the United States that, along with treason, it is one
of only two criminal offences named in the Constitution. Although
now better known for its role in presidential security, the Secret
Service was actually founded by the Treasury in 1865 to combat
currency counterfeiting.

Fake bills make up a tiny fraction of the cash in circulation at
any time - the Service puts it at less than 0.1 per cent - but this
still amounts to some $780 million in the US alone. And its impact
can be significant: losses incurred by accepting counterfeit
currency are not covered by insurance, and a run of fake bills will
shake international confidence in the dollar. In the UK, where
known fake notes made up approximately 0.03% of all sterling in
circulation, £13.7 million worth of counterfeit notes were removed
from circulation last year. The vast majority (98 per cent) were
£20 notes.

Almost every physical attribute of the money in your wallet was
conceived with the intention of making it hard to duplicate. UK
notes are printed on paper made from a mixture of cotton fibre and
linen rag; euro notes are printed on 100 per cent cotton; and US
notes are printed on paper composed of 75 per cent cotton and 25
per cent linen, giving it a feel that's easily distinguished from
the smooth wood-pulp paper commonly used in copiers.

In 1996, US currency underwent a significant redesign,
specifically to combat the growing use of colour copiers and
computer scanners by counterfeiters as the technology became more
sophisticated and widespread. The US Treasury has since introduced
three further series of notes, each employing more complex security
features: the most recent of which includes coloured backgrounds,
intricate patterns of microprinting, water-marks, embedded security
threads visible when the bill is held to the light and ink that
appears to change colour, depending on the viewing angle.

Security features of UK notes are similar and include raised
print (eg on the words "Bank of England"); watermarks; embedded
metallic thread; holograms; and fluorescent ink visible only under
UV lamps. There are three printing processes involved (offset
litho, intaglio and letterpress) using a total of 85 specialised
inks. Euro notes incorporate many of these features too, including
watermarks, raised print, a metallic security strip, holograms, and
colour-changing ink. But even the latest technology cannot thwart
every forger. "The security features make it more difficult," says
Special Agent Edwin Donovan, "but there's no such thing as
'uncounterfeitable'."

--

When Talton set out to circumvent the US Treasury's security
measures, he had no experience in counterfeiting, graphic design or
printing, and he didn't even own a computer. His first attempts
were made with a Hewlett-Packard all-in-one inkjet
printer/scanner/fax/photocopier, which could be picked up at the
time for less than $150. Early experiments, printed on regular
paper, were fuzzy, so he cleaned up the original image on a
computer. But there was a problem, Talton says: "It wouldn't take
the mark." Counterfeit-detection pens mark yellow on genuine
currency but brown or black on fake. Talton didn't know why. At
first he thought the Treasury treated the paper, so he experimented
with chemicals he found at the garage and even tried dipping his
notes in fabric softener. Nothing worked. Frustrated, he began to
take a detection pen everywhere he went, trying it on any paper he
came across. He was about to give up when one day, in the toilet,
he found himself staring at the roll of tissue. He took out the
pen: the mark showed up yellow. Talton discovered that toilet
paper, Bibles, dictionaries and newsprint are all made from the
same recycled paper pulp, and all take the yellow mark. Newsprint
is strong, and it has an additional advantage for the large-scale
buyer: as Talton puts it, "Newsprint is real cheap."

Every investigation that the US Secret Service conducts into
counterfeiting has the same goal, says agent Donovan: "To stop the
bleeding." In order to staunch the flow of fake bills, US Treasury
agents must arrest the people who are passing them, trace the
transactions back up the chain of distribution, catch the printer
and seize his equipment. "Plant suppression", as the service calls
it, is a painstaking process: wise printers insulate themselves so
those who spend the money have no idea of its source.

Talton's counterfeit notes were first noticed early in 2005. All
$100 bills, they were meticulously made. "It was key to his
success," says Mack Jenkins, one of two US attorneys who prosecuted
the case. "He didn't just make the easiest-to-produce counterfeit;
he made the best he could." The simplest method of making
counterfeit money is to scan both sides of a bill and print them on
either side of a piece of paper. But in a real bill the security
strip and watermark are embedded, so this kind of counterfeit is
never convincing.

Talton realised he could solve the problem by using two sheets
of tissue-thin newsprint: he printed imitation watermarks and
security strips on the back of one, then glued the sheets together
with the security features inside. Next he printed the front and
back faces of the bills on either side of the sheets, which he hung
from clothes-lines and coated with hairspray, creating a texture
similar to that of genuine currency and a barrier that helped the
paper take the mark of a counterfeit pen. Finally, he cut the notes
to size. For all his scrupulousness, though, Talton used the same
scan for every $100 bill he printed, so the alphanumeric codes to
the left and right of the portrait of Benjamin Franklin never
changed. These are the quadrant number and the face-plate number,
which indicate which plate at the Bureau of Engraving and Printing
was used to make the bill: Talton's $100 came from plate no 38,
spot H, quadrant no 2, and so was marked H2 and H38.

Albert Talton says he did not have any grand plan in mind when
he started his operation. It was just an experiment "to see if I
could do it", he tells me in a letter from prison, a few months
after our initial conversation. Once he had made 20 or 30 bills, he
gave them to an acquaintance - "a street person" - to see what he
could do with them. The acquaintance sold them and returned for
more. The H2/H38 notes appeared slowly in southern California,
logged by Secret Service officers one or two at a time early in
2005. For the next year they followed a similar pattern: $100 here,
$200 there, always around Los Angeles. But in 2006, the bills began
to spread across the country in large quantities: $11,500 in
January; $57,600 in March; $115,100 in September. In 2005 and 2006,
a total of $1,300,200 in H2/H38 notes were retrieved. Secret
Service agents questioned anyone caught passing the notes in any
volume, but they always told the same story: they had no idea that
the money was counterfeit and they certainly didn't know where it
had come from. By early 2007, the stream of notes had become a
flood - $347,700 in March alone. Jenkins would later calculate that
by the end of 2008, at least $127,000 in H2/H38 notes had been
spent in Macy's stores, and $19,000 in Jack in the Box fast-food
joints. But the Secret Service still had no leads.

--

In September 2007, Talton received a single order for $500,000
and began working day and night. He dedicated an upstairs room in
his new house to a regimented counterfeiting process, with two
Hewlett-Packard computers, nine inkjet and laserjet printers,
stacks of paper divided by type; it was a manufacturing routine
based on production-line principles: "Probably the best organised
office I've ever seen," Mack Jenkins says. Once a week, Talton
drove to Staples in nearby Hawthorne to replenish his supply of
printer cartridges, drop his empties in the store's recycling bin,
and use a Staples rewards card to accrue points in his own name. In
the last three months of the year, Secret Service offices logged
the passing of another $1,297,500 in counterfeit $100 bills bearing
the H2/H38 mark. Agents were no closer to finding the person who
was printing them than they had been two years before.

On January 14, 2008, at an H&M store in LA, a former
employee bought $1,000 worth of clothes with $100 bills that all
bore the H2/H38 mark. The following day two women returned with the
purchase and asked for a refund. Under interrogation, the three
suspects not only admitted that they knew the notes were
counterfeit but also revealed who they had come from: Troy Stroud,
who was put under surveillance.

Two months later, Stroud was hawking Talton's latest product: a
counterfeit $20. Because $20 bills are so easy to pass - few
businesses check every one they receive - the investigation assumed
a greater sense of urgency. Informants wearing wires met with
Stroud and bought some of his H2/H38 bills; they also introduced
him to two undercover Secret Service agents. The service got
everything on tape and put a transponder (a receiver-transmitter
tracking device) on Stroud's white Range Rover.

On April 10, Paul McCorry attended a meeting at which $2,500 in
counterfeit hundreds was sold to another informant on the Secret
Service payroll: he arrived in an orange Mercedes coupe bearing a
licence plate that read "MCCORRY ". On April 15, three agents
tailed Stroud to a Popeyes fried-chicken franchise in Inglewood.
While Stroud waited in the drive-through line, special agent
Matthew Mayo entered the restaurant and watched him pay for his
meal with a $20 bill. Naturally, it was a counterfeit.

On April 23, agents followed Stroud to the house in Lawndale.
The following day, they searched the bins outside, turning up
fragments of counterfeit bills, printer cartridges, and a name:
Albert Talton.

Early in the morning of May 8, Stroud was arrested. Talton's
house in Lawndale was raided later that day when the Secret Service
entered using a battering ram and shotguns. They found Goldberg at
work in the kitchen; McCorry was in the bathroom; Talton himself
was upstairs. On a computer screen was the image of a $100 bill.
The agents found $162,000 in finished notes, and almost $1.4
million in partially completed bills. "You can't get caught much
more red-handed than that," Mack Jenkins says.

Between November 2008 and May 2009, Albert Talton and his three
co-conspirators were convicted of "forging or selling counterfeit
obligations of the United States". Talton was sentenced to nine
years and two months in prison. The Secret Service put the total of
all currency printed by Talton and successfully spent up to March
2009 at $6,798,900 - though ultimately both Talton and the
authorities acknowledged that the sum was higher. "They agreed to
keep it under the seven million mark," Talton says. "I had bills
out there after that - and those weren't even just the hundreds."
By the time Talton was arrested, his money had been circulated in
every state in the nation and in nine foreign countries. Of all the
phony currency that was confiscated, four examples will be filed in
the steel drawers of the specimen vault. The rest will be burned by
the Secret Service - all but four further bills. In his office in
the US courthouse in downtown Los Angeles, Mack Jenkins explains
that he and his fellow prosecutor, Mark Williams, are awaiting
delivery of two sets of examples of Talton's best work - a $20 and
a $100. These will be mounted and framed as souvenirs.

"So we will have our own," Jenkins says. "It will be stamped
'counterfeit' on the back, but it will be up on our walls."

Williams smiles. "And if we ever want some Popeyes," he says,
"we'll just crack the plaque open and go buy some
chicken."

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